July 3, 2024 – Consumers in the US are steadily opting for both dairy and non-dairy cheese, driven by diverse dietary needs, health considerations, and evolving taste preferences. Innova’s 360 research into US cheese market trends allows for identification of key insights into market size, consumer insights, new product launches, flavors, and claims, as well as what may develop in the future.
Cheese Market Size and Trends
The US cheese market leads global sales, followed by Germany, which holds less than half this market size. US cheese sales are expected to continue growing, with both sales and product development rising over the past five years. Dairy cheese accounts for 98% of sales in the US. Natural semi-hard and soft cheese types are growing at 2% and 3% CAGRs, respectively.
Amidst a slower start, non-dairy cheese sales are increasing faster than dairy cheese. However, the overall market size for non-dairy cheese remains significantly smaller.
US per capita cheese consumption ranks 19th globally, with Greece at the top. Natural cheese accounts for over three-quarters of per capita cheese consumption, while non-dairy cheese remains a small fraction. This growth reflects the diverse preferences of US consumers for both dairy and non-dairy cheese products.
New Product Launch Trends
There is a 17% rise in non-dairy cheese product launches over the past five years. Dairy cheese product launches are also increasing since 2021. Semi-hard and hard cheese account for 43% of new product launches, followed by processed cheese, soft and semi-soft cheese, and non-dairy cheese. Notably, non-dairy cheese accounts for 12% of total cheese introductions in 2023, up from 5% in 2019.
US Cheese Market Top Companies and Brands
In the US cheese market, private labels account for 41% of cheese sales. Kraft Heinz and Sargento are the top two brands in cheese sales outside of private label, collectively accounting for nearly another 40% of sales. The most active launchers of new dairy cheese products are Ahold Delhaize, Kraft Heinz, Kroger, and Aldi, and for non-dairy cheese, Otsuka, Miyokos Creamery, and Good Planet Foods.
In the dairy cheese category, Kraft Heinz is the active brand with the most dairy cheese entries. Its leading brands include Cheeze Whiz, Kraft Singles, Philadelphia, Taco Bell, and Velveeta. In 2021, Kraft Heinz divested its natural cheese portfolio to Lactalis, focusing further on processed cheese products. Moreover, the company’s Philadelphia brand has launched its first plant-based spread offering.
In the non-dairy cheese space, Otsuka Pharmaceutical is leading in innovation. This Japan-based pharmaceutical company also operates a consumer products division that manufactures the well-known Daiya non-dairy cheese brand. In March 2023, Otsuka announced a multi-million-dollar investment in natural fermentation technology aimed at creating a “tastier, meltier, and stretchier plant-based cheese” than existing options. The company successfully launched its new cultured plant-based cheese products in December 2023.
Consumer Insights and Preferences
Consumers usually eat cheese because it is healthy, tastes good, and offers convenience. In the US, 62% of consumers have purchased dairy cheese products in the past year, and 7% have opted for non-dairy cheese. Notably, different demographic groups consume dairy and non-dairy cheese. Dairy cheese appeals more to older, suburban consumers, whereas non-dairy cheese skews younger, urban professionals, particularly those who are vegan. This highlights the need for targeted marketing strategies.
US cheese market trends display that the majority of dairy and non-dairy cheese consumers prefer eating these products at least once a week, which lead to an overall increase in cheese intake. There has been a significant 36% rise in non-dairy cheese intake compared to dairy cheese consumption over the past year. This increased consumption of both types of cheese is driven by changes in taste preferences, lifestyle choices, and perceived health benefits.
Dairy cheese is commonly consumed during lunch and dinner, whereas non-dairy cheese is more frequently preferred at snacking times. Additionally, consumers’ purchasing decisions are mostly influenced by the claims of real or natural ingredients in cheese products.
Claims and Positionings in Cheese Trends
The US cheese market trends show that most non-dairy cheese products have plant-based, vegan, and gluten-free claims. Clean labels for dairy cheese products feature no additives or natural ingredients. In the non-dairy cheese space, clean labels highlight GMO-free, organic, and palm oil-free claims.
Ethical claims on dairy cheese mostly focus on animal ethics and packaging, whereas non-dairy cheese ethical claims generally emphasize environmental concerns. No trans-fat, reduced calories, reduced sodium, and limited edition claims are growing strongly in the dairy cheese space. In non-dairy cheese, emerging claims include limited edition, low saturated fat, and heart healthy.
Top Flavors and Ingredients in Cheese Trends
Cheddar and cream cheese entries are growing fastest in the dairy and non-dairy cheese markets, respectively. Non-dairy cheese products are increasingly featuring flavors like vegetable, herb, and fruit, whereas dairy cheese launches are focusing on spices, seeds, and fruit flavors.
The fastest growing ingredients in non-dairy cheese are edible oils, enzymes, starch, and acidity regulators. On the other hand, in dairy cheese there has been increasing uses of cream, whey and whey protein concentrate.
What’s Next in the US Cheese Market?
Amid inflationary pressures affecting food budgets, some consumers in the US are reducing their consumption of non-dairy cheese. Non-dairy cheese brands can leverage this opportunity by investigating the feasibility and profitability of adding value brand extensions to their products. This may attract budget-conscious consumers looking for affordable options without compromising on dietary preferences.
Non-dairy cheese penetration is low as compared to dairy cheese. Moreover, consumers who opt for plant-based foods often seek improved taste and texture in these products. Technological advancements in this category might help to enhance these qualities and gain consumer interest in non-dairy cheese.
Half of US consumers prefer everyday moments of happiness, with over one-third favoring smaller treats like non-dairy options. Brands may capitalize on this trend by developing convenience-focused formats such as single-serve options.
Cheese products do not often cite ethical claims, except for the humane animal treatment noted on 30% of dairy cheese products. As consumer interest in conscious living rises, brands are likely to highlight existing corporate responsibility initiatives such as grass-fed or free-range, carbon neutral, or renewable energy efforts. These initiatives might pique the interest of health-conscious consumers. Innovations in taste, texture, and ethical sourcing are likely to shape the future of the US cheese market, meeting evolving consumer preferences for healthier, more sustainable options.
This article is based on our report, “Crafting the Future: US Trends in Dairy & Non-Dairy Cheese Innovation.” If you are interested in reading this report, feel free to request a demo.
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